Safestore (SAFE) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Safestore (United Kingdom)

Based on various researches at Oak Spring University , Safestore is operating in a macro-environment that has been destablized by – there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing energy prices, challanges to central banks by blockchain based private currencies, technology disruption, etc

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Introduction to SWOT Analysis of Safestore

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Safestore can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Safestore, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Safestore operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Safestore can be done for the following purposes –
1. Strategic planning of Safestore
2. Improving business portfolio management of Safestore
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Misc. Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Safestore

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Strengths of Safestore | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Safestore are -

Diverse revenue streams

– Safestore is present in almost all the verticals within the Misc. Transportation industry. This has provided Safestore a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.

Low bargaining power of suppliers

– Suppliers of Safestore in the Transportation sector have low bargaining power. Safestore has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Safestore to manage not only supply disruptions but also source products at highly competitive prices.

Innovation driven organization

– Safestore is one of the most innovative firm in Misc. Transportation sector.

Learning organization

- Safestore is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Safestore is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Safestore emphasize – knowledge, initiative, and innovation.

Training and development

– Safestore has one of the best training and development program in Transportation industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

High brand equity

– Safestore has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Safestore to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Effective Research and Development (R&D)

– Safestore has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Safestore staying ahead in the Misc. Transportation industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Highly skilled collaborators

– Safestore has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Transportation industry. Secondly the value chain collaborators of Safestore have helped the firm to develop new products and bring them quickly to the marketplace.

Cross disciplinary teams

– Horizontal connected teams at the Safestore are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Digital Transformation in Misc. Transportation industry

- digital transformation varies from industry to industry. For Safestore digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Safestore has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Strong track record of project management in the Misc. Transportation industry

– Safestore is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Ability to recruit top talent

– Safestore is one of the leading players in the Misc. Transportation industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.

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Weaknesses of Safestore | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Safestore are -

Slow decision making process

– As mentioned earlier in the report, Safestore has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Transportation industry over the last five years. Safestore even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

High operating costs

– Compare to the competitors, Safestore has high operating costs in the Misc. Transportation industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Safestore lucrative customers.

Aligning sales with marketing

– From the outside it seems that Safestore needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Transportation industry have deep experience in developing customer relationships. Marketing department at Safestore can leverage the sales team experience to cultivate customer relationships as Safestore is planning to shift buying processes online.

Compensation and incentives

– The revenue per employee of Safestore is just above the Misc. Transportation industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

Slow to strategic competitive environment developments

– As Safestore is one of the leading players in the Misc. Transportation industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Transportation industry in last five years.

High dependence on existing supply chain

– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Safestore supply chain. Even after few cautionary changes, Safestore is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Safestore vulnerable to further global disruptions in South East Asia.

Interest costs

– Compare to the competition, Safestore has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Skills based hiring in Misc. Transportation industry

– The stress on hiring functional specialists at Safestore has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Low market penetration in new markets

– Outside its home market of United Kingdom, Safestore needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Ability to respond to the competition

– As the decision making is very deliberative at Safestore, in the dynamic environment of Misc. Transportation industry it has struggled to respond to the nimble upstart competition. Safestore has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Safestore is slow explore the new channels of communication. These new channels of communication can help Safestore to provide better information regarding Misc. Transportation products and services. It can also build an online community to further reach out to potential customers.

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Safestore Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Safestore are -

Using analytics as competitive advantage

– Safestore has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Transportation sector. This continuous investment in analytics has enabled Safestore to build a competitive advantage using analytics. The analytics driven competitive advantage can help Safestore to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Better consumer reach

– The expansion of the 5G network will help Safestore to increase its market reach. Safestore will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Low interest rates

– Even though inflation is raising its head in most developed economies, Safestore can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Safestore to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Safestore can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Loyalty marketing

– Safestore has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

Creating value in data economy

– The success of analytics program of Safestore has opened avenues for new revenue streams for the organization in Misc. Transportation industry. This can help Safestore to build a more holistic ecosystem for Safestore products in the Misc. Transportation industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Safestore to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Safestore to hire the very best people irrespective of their geographical location.

Developing new processes and practices

– Safestore can develop new processes and procedures in Misc. Transportation industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Safestore is facing challenges because of the dominance of functional experts in the organization. Safestore can utilize new technology in the field of Misc. Transportation industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Learning at scale

– Online learning technologies has now opened space for Safestore to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Safestore can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Manufacturing automation

– Safestore can use the latest technology developments to improve its manufacturing and designing process in Misc. Transportation sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

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Threats Safestore External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Safestore are -

Stagnating economy with rate increase

– Safestore can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Misc. Transportation industry.

Easy access to finance

– Easy access to finance in Misc. Transportation industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Safestore can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Consumer confidence and its impact on Safestore demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Misc. Transportation industry and other sectors.

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

Regulatory challenges

– Safestore needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Misc. Transportation industry regulations.

Shortening product life cycle

– it is one of the major threat that Safestore is facing in Misc. Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Environmental challenges

– Safestore needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Safestore can take advantage of this fund but it will also bring new competitors in the Misc. Transportation industry.

High dependence on third party suppliers

– Safestore high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Safestore may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Transportation sector.

Backlash against dominant players

– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Safestore business can come under increasing regulations regarding data privacy, data security, etc.

Increasing wage structure of Safestore

– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Safestore.

Technology acceleration in Forth Industrial Revolution

– Safestore has witnessed rapid integration of technology during Covid-19 in the Misc. Transportation industry. As one of the leading players in the industry, Safestore needs to keep up with the evolution of technology in the Misc. Transportation sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Safestore in Misc. Transportation industry. The Misc. Transportation industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

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Weighted SWOT Analysis of Safestore Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Safestore needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of Safestore is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of Safestore is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Safestore to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Safestore needs to make to build a sustainable competitive advantage.

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